About 60% of greenhouse gas emissions originated by human activities are caused by energyproduction1, a third of which is used by the agricultural sector

In Europe more than a fourth of energy consumption is attributable to cultivation and food processing2. In the United States it is estimated that agriculture accounts for about 10% of total greenhouse gas emissions with over 600 million tons of CO2 equivalent3.

The food production chain in its entirety has a considerable impact on climate, however there are significant differences between the various types of food processes: for example, a dish of pasta - from farming the wheat to cooking in the kitchen - generates 1,013 g of CO2 emissions per kilo of product, and a meat-based dish impact on climate is 20 times higher4. Most of these emissions are concentrated in the agricultural phase.

Consumers’ dietary choices can affect the entire agri-food supply chain, by steering the food processing industry, and consequently the world of agriculture, towards processing raw materials with a lower environmental impact. INFOGRAFIC

Today 38% of the Earth surface is given over to agricultural activities

Today the land used for agricultural purposes occupies about 38% of the surface of the Earth5, it is estimated that by 2050 another 120 million hectares of land will be converted to agricultural use to meet the world’s increasing demand for food6, threatening ecosystems characterized by high levels of biodiversity.

About 70% of water consumed by the world population7 is attributable to agriculture, giving rise to water stress conditions in many geographical areas. High levels of water consumption, together with the use of pesticides and herbicides, whose use has increased by more than 25 times in the last 50 years8, are contributing to degrade water resources and natural habitats.

The reduction of varieties and species used in agriculture is speeding up the loss of genetic variability and biodiversity: 90% of the world’s calorie needs are met through the cultivation of just 30 crop species, while 14 animal species account for 90% of those bred9. This loss of diversity means diminished ability of the crops to adapt to climate change, thus jeopardizing - on the long run - global food safety.

Most of the waste occurs when food is consumed: at home and in restaurants.

However, a substantial portion of the losses occur also in the phases of cultivation, harvest, storage and processing of the raw materials, mainly due to inefficiencies, inadequate agricultural practices, outdated storage and processing methods.

Each food loss means also a waste of natural resources and of the labour spent to produce it.

We measure our products’ environmental impact throughout their entire life cycle and direct our offer towards products at the base of the environmental pyramid: their production requires fewer resources from the Planet in terms of greenhouse gases, water and land occupied to regenerate the resources used.

To date, 94% of Barilla's products are in the lower part of the Double Pyramid.

In collaboration with the growers’ associations, supply chain farmers and scientific partners, we are committed to identifying solutions that will allows us to grow the main raw materials used for Barilla’s recipes in a more sustainable manner.

We have defined sustainable cultivation projects for all of our strategic supply chains.

Inspired by a Sustainable Agriculture Code, we develop Specifications that provide farmers and ranchers with guidelines on cultivation practices that improve production yields and quality, while reducing environmental impact and protecting animal welfare.

The Sustainable Agriculture Code applies to purchases of durum wheat and semolina, common wheat and flour, rye and rye flour, tomato, vegetable oil and eggs, which together account for more than80% of the ingredients used by the Group.

To smooth the transition to more sustainable models of agricultural production we are committed to purchasing by 2020 all our main ingredients from supply chains that use responsible cultivation practises, capable of improving environmental and social sustainability.

We adopted environmental management systems, certified by an external body, to reduce depletion of resources and lower the impact of our production activities on climate change: by 2020 the goal is to reduce by 30% greenhouse gases emissions and water consumption per ton of finished product compared to 2010.

We reduced CO2emissions per ton of product by 28% compared to 2010.

CO2 emitted by plants in relation to product volumes (milion tons of products/Million tons of CO2)

We reduced water consumption by 21% per ton of product compared to 2010.

Dissemination of awareness and good practices for sustainable agriculture

To share more sustainable cultivation practices with our partners in the agricultural supply chains and offer adequate support to those who want to put an effort into reducing their activities’ environmental impact, starting from cutting food losses at the beginning of the supply chain.

Support to the development of an inclusive supply chain respecting workers and enhancing women

To monitor, throughout those supply chains considered at risk, social aspects, such as the protection of human rights of the workers and the enhancement of female farmers.

Transparency and more details on strategies to improve supply chain sustainability

To better explain the choices Barilla made in putting into practice the pledge to use responsible supply chains for its procurements, by providing detailed criteria on how to assess raw material sustainability and by ensuring that the progress made in the application of these criteria are monitored by a third party independent body.

Traceability of raw material origin

To develop systems to guarantee complete product traceability along the entire supply chain, from the fields where the raw materials originate all the way through their journey to the retail channels.

Participate in the creation of the document on the principles of sustainable agriculture.

ANNUAL ACTIVITIES

Participate regularly in the meetings

2012

FAO - SAFA Sustainability Assessment of Food and Agriculture systems

BARILLA’S INTEREST

Share the project to implement specific guidelines at the international level to improve sustainability of the agri-food systems.

ANNUAL ACTIVITIES

Participate regularly in meetings and workshops and check the application of the Guidelines

2013

Project “Industrial Symbiosis” - ASTER

BARILLA’S INTEREST

Find new opportunities to use production waste as secondary raw materials for packaging or other uses.

ANNUAL ACTIVITIES

Participate regularly in the meetings.

Supply waste for testing.

Test material produced.

2008

Italian section of the European Technology Platform “Plant for the Future”

BARILLA’S INTEREST

Share the European prospective on priorities in the area of plant research and funding opportunities at the national/European level.

ANNUAL ACTIVITIES

Participate regularly in the meetings.

Involvement as member of the “Platform” Board.

Contribute to the preparation of official documents.

2009

Collaborate with Universities and research institutions in the Mediterranean Basin, among those: HORTA, the Cattolica University of Piacenza, the University of Thessaly, the Bahri Dağdaş International Agricultural Research Institute of Konya, and in North America, the University of North Dakota and UC Davis University.

BARILLA’S INTEREST

Favour the transfer of expertise and know-how between the academic world and supply chain players to adopt better agronomic practices.

Develop standards shared among all the supply chain players and verify their application with the goal to improve sustainability along the supply chains that provide the ingredients for Barilla’s recipes.

ANNUAL ACTIVITIES

Participate in work groups to share good practices.

Promote supply chain agreements.

Fund projects aimed at speeding up the dissemination of good practices.

The Group is also involved in the “Environmental Steering Committee” of The Consumer Goods Forum; specifically on issues related to food waste and deforestation.

Barilla is again the number one Italian company in "Business Benchmark on Farm Animal Welfare”, that assesses the commitment of companies in the agri-food sector for the protection of farm animal welfare.

Harrys, Group’s brand, was awarded with "Good Egg Award” by the association Compassion in World Farming, a recognition given to companies that commit to using exclusively eggs from cage-free hens. In 2011 and 2012 the brands Pavesi, Mulino Bianco and Le Emiliane received the same award.

The "Grano Duro" project received the jury special award “Procurement award – Beyond saving” assigned by “The Procurement magazine”, in collaboration with Valeo-In and I-Faber as appreciation to companies that stood out for innovation, sustainability and efficiency in the procurement management process.

Barilla participates in the Carbon Disclosure Project (CDP) monitoring campaigns, an independent organisation that assesses and enhances companies’ commitment to curbing climate change and making a responsible use of natural resources. In 2016 the Group’s performance relative to management and reporting on greenhouse gas emissions, the use of water resources and protection of forests were:

Barilla chooses the best ingredients for its products, focusing not only on their quality, but also on the sustainability of the farming practices used to produce them.

The rights of the people involved in the supply chain, the impacts of the production of raw materials on the environment and on animal welfare are key parameters in choosing raw materials.

The environmental impact of the food chain is indeed significant. Amongst the various methods used to assess environmental impacts, Barilla has adopted since 2009 the Life Cycle Assessment (LCA) of the products to calculate the impact on the environment of all product’s “life steps” from field to table, taking three indicators into consideration: greenhouse gas emissions (Carbon Footprint), the consumption of water resources (Water Footprint) and the use of soil (Ecological Footprint). The environmental impact of 423 raw materials used in the recipes was measured.

The study showed that the most significant step in the life of a product, in terms of emissions, is cultivation, because of different factors, such as: use of fertilisers, pesticides, diesel fuel for machinery and water for irrigation.

For this reason, Barilla has decided to develop and promote more efficient and sustainable agronomic practices. In collaboration with scientific partners and suppliers, it has identified Sustainable Cultivation projects for all the supply chains of the key ingredients.

Objectives

Achieved Results

Used Quantity

GRAINS

Favour the dissemination of sustainable practices identifying more efficient cultivation systems in all countries.

DURUM WHEAT

The implementation of cultivation projects continues in the countries where the raw materials are purchased, and procurement is made following dedicated regulations.

COMMON WHEAT AND RYE

Collaborations are in place in Italy, France, Switzerland and Germany to identify the best agricultural practices.

Italy: 70% of tomato is certified according to the Global G.A.P. sustainable agriculture standard.

United States: the process to identify the best agricultural practices all along the cultivation process has started.

53,674 tons of which:

45,639 t purchased in Italy

8,036 t purchased in the USA

VEGETABLE OILS

Use exclusively oils from supply chains with high environmental standards

SUNFLOWER OIL

Italy: collaboration with the main suppliers, such as Cereal Docks and Coppini, to provide support to farmers and favour crop rotation.

RAPESEED OIL

France: The analysis of the local context and possible relationships of cooperation is in progress.

Sunflower oil: 20,003 tons

Rapeseed oil: 5,998 tons

EGGS

Procurement only from supply chains in line with Barilla Guidelines on Animal Welfare.

Italy: 100% category “A” eggs from cage-free hens.

France: 100% category “A” eggs from cage-free hens for Mulino Bianco and progressive use of this type of eggs also for Harrys products with the aim of completing transition by March 2017.

United States, Russia and Brazil: the analysis to identify suppliers of eggs from cage-free hens is ongoing.

Total volumes of eggs from cage-free hens: 78%

23,691 tons of which:

18,543 t purchase in Italy

4,809 t purchased in France

260 t purchased in Brazil

PRODUCT PACKAGING

Procure products following the Barilla Guidelines on “Sustainable Packaging” that establish:

Reduction of the quantity of packaging material

Use of recyclable packaging

Use of materials from responsibly managed forests

Life Cycle Analysis of the packaging

100% purchases according to Guidelines

100% of cardboard in virgin fibre is certified according to the FSC, PEFC and SFI standards

99% of Barilla packaging is recyclable

2 billion packs in paper and cardboard

More than 25,000 t of flexible film

SUPPLY CHAINS WITH POTENTIALLY CRITICAL ENVIRONMENTAL AND SOCIAL ASPECTS

For the critical supply chains, Barilla asks the suppliers to subscribe to the Sedex platform, validated on a quarterly basis, to ensure full respect of human rights. Additionally, 100% of the suppliers receive Barilla’s Code of Ethics.

Objectives

Used Quantity

CANE SUGARSupport projects of sustainable procurement in collaboration with the main suppliers and define specific ethical-environmental standards.

1,005 t

COCOACarry on the project to support the communities of the cocoa supply chain in Africa, in collaboration with the main supplier Barry Callebaut and its Foundation.

100% of Barilla’s cocoa suppliers are members of the World Cocoa Foundation.

11,455 t

BEEF AND PORKProcure products from supply chains in line with Barilla’s Guidelines on Animal Welfare and apply these Guidelines to all the Group’s supplies by 2020.

In Italy, Guidelines are already applied to all supplies.

2,666 t

BARILLA’S GUIDELINES ON ANIMAL WELFAREdrawn up in collaboration with the Compassion In World Farming (CIWF) organisation

Barilla focuses in particular on two supply chains:

Eggs from cage-free hens

Supply chain of meat for sauces

We do not use products made from farmed fish, but only tuna. All tuna suppliers are MSC certified: Marine Stewardship Council.

Animal Welfare Criteria

Barilla acknowledges that animals are sentient beings and Animal Welfare includes both their physical and mental wellbeing, and their ability to express their species-specific behaviour according to the following freedoms:

Freedom from hunger and thirst;

Freedom to have a suitable physical environment;

Freedom from pain, injury and disease;

Freedom to express normal species-specific behaviour;

Freedom from fear and distress.

Animal Welfare Management

Animal welfare standards, which are an integral part of the contracts signed by egg and meat suppliers, are periodically audited. If the supplier does not comply with the standards, Barilla defines a remediation plan according to the seriousness of the non-conformity.

Requirements

All the animals bred in our supply chains must have appropriate access to feed and water to satisfy their needs and thus reduce aggressions.

Density and enriched cages must grant the wellbeing and comfort of animals, enabling them to express species-specific behaviour.

Routine mutilations must be avoided, unless strictly necessary to preserve the wellbeing of animals.

The transport of animals must be always carried out minimising potential causes of stress and limiting its duration as much as possible. Transport times exceeding 8 hours should be always avoided.

Furthermore, animals must be always stunned before slaughtering.

Antibiotics must be used responsibly, reducing their use and avoiding their prophylactic use, whenever possible.

The use of hormones for growth is not allowed.

Genetic engineering or cloning on breeding animals and/or on their progeny is not allowed.

The selection of breeds should take place on the basis of traits giving better wellbeing and not only increased productivity.

DURUM WHEAT: A STRATEGIC RAW MATERIAL

Barilla purchases durum wheat both through cultivation contracts, and through contracts drawn up to cover specific uses. Cultivation contracts include shared specifications with producers’ association that contain specific details for the cultivation and storage of raw materials.

This leads to higher productivity, better quality and lower environmental impact of the raw material by granting premiums according to the quality provided.

SUSTAINABLE DurUM WHEAT

In 2009 we started in Italy a specific project for sustainable agriculture in collaboration with HORTA, a spin-off of the Università Cattolica of Piacenza. We also started similar projects in other geographies where durum wheat is grown.

We firstly compared the various agronomic practices and then identified the most efficient and sustainable ones. We then proceeded with validation, having performed full field tests in different Italian locations.

These practices, such as crop rotation, have been translated into the “Barilla Decalogue for Sustainable Cultivation of Durum Wheat”.

In addition to the Decalogue, the platform granoduro.net was developed as a support system to advise farmers on technical decisions, such as fertilizing and treatments against diseases, using meteorological data, soil characteristics, mathematical models and field observations. Thanks to the combined application of the Decalogue and granoduro.net, the monitoring data collected shows that it is possible to reduce up to 30% of greenhouse gas emissions and production costs as well as to increase production yields up to 20%, thus ensuring a higher income for farmers. Since 2012 this system has succeeded in constantly reducing the environmental impacts, increasing profits and producers’ resilience, especially during critical years. This tool has been made available to farmers free of charge also for the wheat not sold to the Group.

ITALY

732,000 t of durum wheat ground in Barilla mills

of which:

564,000 t purchase in Italy

400,000 t with Cultivation Contracts

190,000 t from more than 1,500 armers participating in the Sustainable Durum Wheat project

New Supply Chain Contracts in Italy

After a decade-long collaboration with many farms, in 2016, Barilla introduced three-year cultivation contracts, as opposed to annual ones; these longer contracts are meant to reward virtuous Italian farming, enhancing and promoting local durum wheat. The new contracts, starting from the 2017 harvest, will account for about 55% of the durum wheat ground in Italy in Barilla mills and will engage 50 suppliers and more than 5,000 farms.

TURKEY

Purchased amount141,835t

Cooperation with the Bahri Dağdaş International Agricultural Research Institute of Konya to identify more sustainable cultivation methods in Central Anatolia.

USA AND CANADA

Purchased amount229,000t

Cooperation with Agri-Food Canada and North Dakota University to identify and publish the best agronomic techniques for durum wheat cultivation.

FRANCE

Purchased amount22.000 t

Cooperation with local organisations to complete the assessment of environmental impacts of current agronomic practices.

GREECE

65.000 t durum wheat purchased in Greece, of which 15,000t with Cultivation Contracts

Cooperation with the University of Thessaly to define sustainable cultivation methods. The Decalogue for Sustainable Cultivation of Durum Wheat was completed and the testing of the agronomic decision support system granoduro.net is ongoing.

GLYPHOSATE

All Barilla products are safe and in full compliance with the existing Laws. As to glyphosate in particular, Barilla has taken a firm commitment to be a glyphosate-free Company in all our sourcing of durum wheat for the European pasta business.

We have implemented a durum sourcing plan that requires suppliers to deliver durum wheat without glyphosate (levels below any detection limit) and bans the usage of glyphosate in the pre-harvest phase.

The sourcing plan is already in execution with contracted volumes from Australia and US Desert as well as with the definition of glyphosate-free planting contracts in the Canadian and US Northern Plains. We have clearly stated to the US and Canadian durum suppliers that we will source only glyphosate-free durum for our European pasta business and have pushed them to apply agronomic practices that can ensure the absence of glyphosate in their productions.

In our continued effort to improve the products’ sustainability, we measure the environmental impact according to the Life Cycle Assessment (LCA) method. We include the entire supply chain in the analysis: from raw material cultivation, to processing and packaging of the products, all the way to retail, use and final disposal. This allows us to assess the main environmental impacts in terms of greenhouse gas emissions, water consumption and land resources used.

61EDP covering 69% of 2016 production

To provide a transparent and scientifically valid communication on the environmental performance of the products throughout their life cycle, we publish the Environmental Product Declaration – EPD, an international tool of analysis and communication verified by an external board and compliant with ISO:14025 standard.

94%products at the base of the Double Pyramid Model

On the basis of the analysis of the environmental impacts of our products we assess their compliance with the Double Pyramid Model. In 2016, 94% of Barilla products were in the lower part of the Model, in line with 2015.

Reduction of tons of CO2eq emissions per tons of wheat using granoduro.net

Calculation of the reduction of greenhouse gas emissions is based on data collected from the environmental impacts relative to 95% of wheat purchased from crops where the support tool granoduro.net was used in making agronomic decisions

Durum wheat semolina

Total tons purchased

Tons purchased from local market

Italy

129,000

129,000

North America

86,000

86,000

Mexico

69,434

69,434

Russia

30,122

30,122

Total

215,000

215,000

Compared to 2015Percentage purchased from local market: 100% in 2015, 100% in 2016

Paper and cardboard for packaging certified according to FSC, PEFC and SFI standards

100%

100%

Recovery of packs after consumption

2015

2016

Recyclable packs placed on the market

98.70%

98.70%

Packs with recycling instructions

99%

99%

Packs made from recycled material

42%

45.50%

10

Human rights protection in the supply chains

Human rights protection in the supply chains

Barilla is committed to the protection of human rights along its supply chain. Particularly, it has identified the risk of employment of child labour and a lack of guarantee of the full respect of human rights in the cocoa and palm oil supply chains as well as the supply of gadgets and promotional items. Regarding these supply chains, we purchase exclusively from suppliers certified by independent parties who verify compliance with ethical and social international standards,such as the SA 8000 certification, which we require from all of our cocoa suppliers. Furthermore, the commitment to respect Barilla’s Code of Ethics is a binding prerequisite for all supply contracts.

2016

Suppliers that are potentially at risk of violating human rights

119

Suppliers exposed to the risk of violation of human rights holding certifications or audit reports by independent third parties on compliance with ethical and social standards

114

Percentage of suppliers certified or having audit reports by independent third parties on compliance with ethical and social standards

96%

11

Barilla's production phase

Barilla's production phase

We are fully committed to reducing the environmental footprint of our production processes by focussing on monitoring and managing emissions and the consumption of natural resources in production plants. We have developed Environmental Management Systems complying with the ISO:14001 international standard and certified by third parties in 89% of the production plants, and we apply energy management systems, certified by a third body, in compliance with the ISO:50001 standard in 9 plants, including the Foggia site, the first pasta plant to be certified in Italy.

88% production volumes manufactured in ISO:14001 certified plants

The commitment to reducing the environmental impact of the Group’s plants is supported by expenses and investments for the protection of the environment amounting to 7.08 million Euro.

No significant sanction has been recorded for non-compliance with environmental laws and standards.

12

Energy and emissions

Energy and emissions

Thanks to the continuous upgrade of our production plants through the adoption of high efficiency technology and electric energy from renewable sources, we are reducing energy consumption and greenhouse gas emissions.

Despite growing production volumes by about 2%, energy consumption has remained stable thanks to the implementation of various projects aimed at reducing energy consumption as part of the “ESP Energy Saving Project”, that involves the Group’s various production sites. In 2016, we developed systems to recover and reduce heat losses, especially in the Caserta, Bolu and Filipstad plants; we renewed the cooling systems in Novara and Castiglione, and we made the air conditioning systems in the production areas more efficient. We also carried on the activities for the replacement of lighting systems with LED lamps, which involved 9 production sites in 2016.

Also greenhouse gas emissions are diminishing, thanks to a more efficient energy use and to the increase of energy supplies from renewable sources. For the brands Mulino Bianco, Grancereale, Pandistelle, Wasa and Barilla sauces we use GO certification (Guarantee of Origin) to confirm the origin from renewable sources of the energy used for production.

Furthermore, smart working projects and the reduction of wheel transport to the benefit of means with lower environmental impact have enabled us to further reduce the greenhouse gas emitted by the Group. The use of the railway link for the transport of durum wheat to the Pedrignano plant has led, for example, to a reduction of about 11,000 tons of greenhouse gas.

Energy Consumption

Compared to 2015Change in energy consumption: in line with previous yearShare of consumption of energy from renewable sources with certificates of origin 48% in 2015, 52% in 2016

Direct and Indirect GHG Emissions

Compared to 2015Reduction of overall scope 1 and 2 emissions: - 4%

Compared to 2010Reduction of emissions in absolute value: - 21%Reduction of emissions per ton of finished product: -28%

13

Water and Waste

Water and Waste

Production plants are equipped with systems for water reuse and specific projects have been developed to reduce consumption, which enabled to keep the same water consumption levels of 2015 despite the production increase.

Furthermore, the plants are encouraged to reduce the quantity of waste produced and to favour methods of recovery. In 2016 each ton of product manufactured generated on average 17 kg of waste, of which the large majority (93%) was recovered.

Water Use and Discharge

Compared to 2015Change in water consumption: in line with previous year

Compared to 2010Reduction of water consumption in absolute value: -13 %Reduction of water consumption per finished product: -21 %

waste

Disposal of waste per type and destination

Compared to 2015Increase of waste generated:+ 4%Change of waste generated vs. finished product: in line with previous year